By IHS Chief Economist Nariman Behravesh and IHS Global Insight Senior Research Director Sara Johnson
Growth rates of the world’s key economies diverge While the global economy remains stuck in low gear, the divergence in growth rates among the world’s key economies is remarkable. Some are in deep recessions (Brazil, Russia, and Venezuela). Others are on the edge (Argentina, Japan, and South Africa). Then there are those, such as France and Italy, that are growing weakly and are vulnerable to setbacks. Growth is more solid, if unexciting, in economies such as Canada, Germany, Spain, Sweden, the United Kingdom, and the United States. A few economies, such as India, Indonesia, the Philippines, and Vietnam, are bright spots. Given its size and the scope of its problems, China is in a category of its own.
United States: The two-tiered economy. The two-tiered nature of the US economy has been evident in recent data—service sectors are doing well, but, manufacturing is struggling. IHS Global Insight expects that weak growth persisted in the first quarter, with real GDP increasing at a 1.2% annual rate. We continue to expect real GDP growth to rebound in the second half, to 2.8%, led by a resurgence in consumer spending. Recent employment reports also point to the two-tiered nature of the US economy, with strong gains in construction, retail trade, healthcare, leisure and hospitality, and professional services, but declines in manufacturing employment.
Europe: Slow …
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